Where is it all headed? What does it all mean?
I’ve let the blog go a bit cold! It’s been a very busy past few months and feeding the beast has been tricky despite a busy tech news season.
A few weeks ago, Oracle announced a semi-hostile takeover bid for my former employer BEA Systems.
The Wall Street Journal put the offer in context with an article that portrayed Alfred Chuang as one of the last of a dying breed – the founder/CEO of an independent mid-sized software company.
The data supporting this assertion are actually mixed.
1. Many mid-sized enterprise software companies are still alive and kicking including TIBCO, SAS, Kronos, Cognos, Manhattan and Parametric.
2. However many mid-sized software companies have left the scene including Siebel, Hyperion, Agile, Retek, PeopleSoft, webMethods, Mercury, and now possibly BEA.
3. However many newcomers seem poised to replace those that have left. For example Salesforce, Successfactors, vmWare, Red Hat, Netsuite and Rearden Commerce.
4. However many of these newcomers are struggling to sustain growth as public companies or are struggling to get public in the first place. And the aggregate revenues & employment of the new companies is far less than the companies they are replacing.
So what does it all mean?
Since inception the high tech industry has moved in cycles. But I don’t think all parts of the industry follow the same frequency. The frequency many of us think of the system architecture cycle. We’ve heard this dozens of times before: first there were mainframes, followed by minicomputers, followed by client-server, followed by N-tier apps, perhaps now followed by something more grand that lives in the cloud. If you look at the history of this evolution, it would lead you to believe high tech has roughly a 7 year clock cycle from boom to bust and back again.
But if you look just at consumer software applications, it would look quite different. First there were many desktop application companies, then there was Microsoft, then there was more Microsoft, then there was more Microsoft and well, you get the point. Microsoft launched Office as a suite in 1989 and it has taken roughly 16 years before anyone or anything managed to mount a credible assault on its hegemony. Much slower clock cycle.
So, whither enterprise software? Is our industry consolidating? If so, is it the consolidation before the next big bang? I’m pretty unsure of both points at this stage.